Software group Ideagen reveals surge in annual profits

gareth mackie

Ideagen, the software developer with a sizeable presence in East Kilbride, today reported its eighth consecutive year of rising sales and profits.

The group, which recently outlined plans to boost its workforce in the South Lanarkshire town, where it employs about 130 people, said adjusted pre-tax profits for the year to the end of April jumped 22 per cent to £6.9 million, on revenues 24 per cent higher at £27.1m.

Ideagen specialises in governance, risk and compliance (GRC) software, and saw its client base swell by more than 800 during the year to stand at more than 3,000. The group counts the likes of British Airways, Imperial Tobacco, Jaguar Land Rover and Ryanair among its customers.

Chief executive David Hornsby said: “Trading since the year end has remained robust and we continue to see strong demand for our products from new potential customers.

“Moreover, our growing recurring revenues and the repeat business derived from more than 3,000 customers, an increase of over 800 from last year, provides the board with confidence in the prospects for the group for the current year and beyond.”

Hornsby told The Scotsman that its Scottish operation was “very important” to the group, which bought East Kilbride-based GRC software specialist Gael in 2015 for £21m.

“Development and marketing are the primary focus points for East Kilbride and we’re continuing to hire people there,” he added, but acknowledged that securing skilled workers was a challenge.

“Technical resources are quite difficult to find in the Glasgow area as there’s a lot of competition, but we’re doing a great job with the universities. We try to find people fresh out of university and train them up.”

Hornsby also said that Ideagen had not seen any downturn in its business as a result of the Brexit vote, thanks to its broad client base and geographic spread.

He added: “Governance, risk and compliance is across many different industries, and some need it more than others, so we focus on those that are highly regulated, such as life sciences, financial services, aerospace and defence. These organisations have to invest in risk management and compliance, because it’s demanded of them by the regulators.”

Aim-quoted Ideagen, which has a total workforce of more than 360, made four acquisitions during year, including the £3.6m purchase of GRC outfit Covalent Software, and Hornsby said that the group would be seeking further deals along with pursuing organic growth, which came in at 10 per cent in the year to April.

“What the market doesn’t like is if you make acquisitions and then don’t create any further value, and the way we do that is by growing the businesses we buy and striking a pretty good deal – we try to pay the lowest amount possible, as you would expect,” he added.

A final dividend of 0.142p a share was proposed, to be paid on 22 November, which would lift the total payout for the year by 15 per cent to 0.21p.